At the heart of the fight to block the $24.6 billion merger is the debate over how Americans buy their groceries.
The Albertsons logo is displayed at an Albertsons supermarket on Aug. 26, 2024 in Los Angeles, California. A federal judge in Oregon is hearing arguments today after the Federal Trade Commission and several states sued to block the planned merger between grocery chains Kroger and Albertsons. Kroger Co. from buying Albertsons Cos. for $24.6 billion is an existential debate about how Americans buy their groceries today.
In wide-ranging testimony delving into everything from egg prices to the proposed divestiture of hundreds of stores, the agency and companies have battled over how to define a grocery store and which businesses are included in the sector. Antitrust enforcers have long focused on grocery markets and established certain variants within the industry. They argue that traditional supermarkets like those owned by Kroger and Albertsons are distinct from other food retailers because of the size of the stores and the product assortment.
Customers can buy staples like milk and eggs everywhere from Walmart and Dollar General Corp. to Costco and Amazon. They argue that the better way to understand food buying today is as a “MULO+ omnichannel” world – an industry term that describes multiple outlets, methods or channels for food buying that include in-store or online.
Kroger and Albertsons announced their deal almost two years ago, saying it would help them compete better against bigger rivals. Albertsons started about six months ago measuring its market share using the MULO+ metric that includes Amazon and Costco, Chief Executive Officer Vivek Sankaran testified in court. Albertsons’ share dropped under this metric.Kroger CEO Rodney McMullen testified that Albertsons is among many competitors for the grocer and that Walmart is the grocer’s “No. 1 competitor.
Marc Lieberman, vice president of merchandising and operations at Walmart US, said club stores and discounters vary from traditional supermarkets, but that Costco and Aldi are competitors in grocery.
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